Washington quarterly revenue projection down more than $1.4 billion

FOR IMMEDIATE RELEASE: Sept. 15, 2011

OLYMPIA –The September revenue forecast for Washington state government shows projected General Fund revenue for the 2011–13 biennium down by more than $1.4 billion, compared to the previous quarterly forecast in June. The figures were released today by the Washington State Economic and Revenue Forecast Council.

“Global economic uncertainty, new data on national output and the stalemate in Washington, D.C., have slowed the outlook for economic activity significantly since our last forecast,” said Dr. Arun Raha, the state’s chief revenue forecaster. “Our reduced revenue estimates today are troubling, but not surprising.”

Under the new forecast, projected revenue for the 2011–13 biennium is down by about $1.41 billion, which reduces total projected General Fund revenue for the biennium to about $30.3 billion. The current two-year budget went into effect July 1.

The forecast also lowered projected revenue for the 2009–11 biennium, which ended June 30, by about $25 million.

Over the past five quarterly forecasts — starting in September 2010 — state General Fund revenue projections for the last biennium and the current biennium have declined by more than $4.8 billion. And since September 2008 — when global stock markets crashed — state revenue forecasts have declined by more than $7.5 billion.

While the latest forecast brought more disappointing news to budget writers, it was not unexpected.

“Today’s news is further illustration of the almost unprecedented magnitude of the Great Recession,” said Marty Brown, director of the state Office of Financial Management. “While we continue to see small glimmers of an upturn in our economy, it is clear that this recovery is going to take even longer than previously expected.”

Last spring, the Legislature approved and Gov. Gregoire signed into law a 2011–13 budget, which included about $4.6 billion in reductions. The budget and other legislation consolidated several state agencies, cut state employee and teacher pay, suspended initiatives 728 on class size and 732 on teacher cost-of-living adjustments, reformed pensions and cut programs in nearly every state agency.